Public Storage, Inc. (the "Company") is an equity real estate investment
trust ("REIT") organized as a corporation under the laws of California
on July 10, 1980. We are a fully integrated, self-administered and self-managed
real estate investment trust ("REIT") that acquires, develops, owns
and operates self-storage facilities. We are the largest owner and operator of
storage space in the United States.
We believe that the Company possesses several primary business attributes that
permit us to compete effectively:
COMPREHENSIVE DISTRIBUTION SYSTEM AND NATIONAL TELEPHONE RESERVATION SYSTEM:
Our facilities are part of a comprehensive distribution system encompassing
standardized procedures, integrated reporting and information networks and centralized
marketing. During 2003 and 2004, we implemented an upgraded information system
platform, which has enabled us to more quickly adapt our pricing and marketing
efforts to market conditions. This distribution system, among other benefits,
is designed to maximize revenue and occupancy
levels through automated pricing.
A significant component of our distribution system is our national telephone
reservation center, which provides added customer service and helps to maximize
utilization of available self-storage space. Customers calling either the toll-free
telephone referral system, (800) 44-STORE, or a storage facility, are directed
to the national reservation system. A representative discusses with the customer
space requirements, price and location preferences and also informs the customer
of other products and services provided by the Company and its subsidiaries.
We believe that the national telephone reservation system enhances our ability
to market storage space.
RETAIL OPERATIONS: The Company has historically sold retail items associated
with the storage business and rented trucks at its storage facilities. In order
to supplement and strengthen the existing self-storage business by further meeting
the needs of storage customers, the Company continues to expand its retail activities.
In addition, full-service retail stores have been retrofitted to some existing
storage facility rental offices or "built-in" as part of the development
of new storage facilities, both in high traffic, high visibility locations.
The strategic objective of these retail stores is to provide a retail environment
to (I) rent spaces for the attached storage facility, (II) rent spaces for the
other Public Storage facilities in adjacent neighborhoods, (III) sell locks,
boxes and packing materials and (IV) rent trucks and other moving equipment.
TENANT INSURANCE PROGRAM: On December 31, 2001, we purchased all of the capital
stock of PS Insurance Company, Ltd., from Mr. Hughes and members of his family.
This insurance company reinsures policies issued to our tenants against lost
or damaged goods stored by tenants in our storage facilities. This subsidiary
receives the premiums and bears the risks associated with the re-insurance.
We believe that this insurance operation will continue to further supplement
and strengthen the existing self-storage business and provide an additional
source of earnings for the Company.
COMPETITION
Competition in the market areas in which we operate is significant and affects
the occupancy levels, rental rates and operating expenses of certain of our
facilities. Development of new storage facilities has intensified the competition
among storage operators in many market areas in which we operate.
In seeking investments, we compete with a wide variety of institutions and
other investors. The increase in the amount of funds available for real estate
investments has increased competition for ownership interests in facilities
and may reduce yields on acquisitions.
We believe that the significant operating and financial experience of our executive
officers and directors, combined with the Company's capital structure, national
investment scope, geographic diversity, economies of scale and the "Public
Storage" name, should enable us to compete effectively with other entities.